Cullen/Frost Bankers - Earnings Call - Q2 2016

Transcript

Speaker 0

Good morning. My name is Nicole, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coenfrost Bank's Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

I would now like to turn today's call over to Mr. Greg Parker, Executive Vice President and Director of Investor Relations. Mr. Parker, you may begin.

Speaker 1

Thank you, Nicole. This morning's conference call will be led by Phil Green, Chairman and CEO and Jerry Salinas, Group Executive Vice President and CFO. Before I turn the call over to Phil and Jerry, I need to take a moment to address the safe harbor provisions. Some of the remarks made today will constitute forward looking statements as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend such statements to be covered by the Safe Harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 as amended.

Please see the last page of the text in this morning's earnings release for additional information about the risk factors associated with these forward looking statements. If needed, a copy of the release is available at our website or by calling the Investor Relations department at (210) 220-5632. At this time, I'll turn the call over to Phil. Thank you, Greg. Good

Speaker 2

morning,

Speaker 1

and thanks for joining us. Today, I'll review second quarter twenty sixteen results for CullenFrost. Our Chief Financial Officer, Jerry Salinas, also provide additional comments before we open it up to your questions. In the second quarter, CullenFrost earned $1.11 per diluted common share, which is flat with the same quarter last year and up from $1.07 a share reported in the previous quarter. Looking overall at the second quarter, credit quality was stable and showed signs of improvement over the first quarter.

Our provision for loan losses was $9,200,000 compared to $28,500,000 in the first quarter. Non performing assets dropped by more than half from $180,000,000 in the first quarter to $89,500,000 in the second. Net charge offs in the second quarter totaled $21,400,000 the vast majority of which were specifically reserved for in prior periods. We're seeing other signs of growth compared with the first quarter. While energy loans continue to drop, total loans outside the energy sector grew at an annualized rate of 7.9% between the first and second quarters.

The first quarter of this year included one time events like the net gain of $15,000,000 from the sale of securities that reduced our concentrations in all dependent economies. It also included a more stringent regulatory debt to EBITDA standard, which we applied to our energy portfolio. The second quarter has been more towards a return to business as usual. Looking deeper at credit quality. Regarding the reduction in non performing assets I mentioned earlier, nearly the entire reduction was a result of payoffs on three credits.

Two payoffs were energy credits totaling $62,800,000 The other was a payoff on a real estate credit of $22,600,000 As a part of these payoffs, we charged off $11,300,000 related to the energy credits. However, this was significantly less than what we had specifically reserved for in prior periods. Loans placed on nonaccrual during the quarter totaled $16,500,000 compared to $100,000,000 in the first quarter, slightly less than half those represented energy loans. Annualized year to date net charge off represent 42 basis points of average year to date loans. In the first quarter, we said we expected net charge offs to increase in the near term, and that's what occurred.

But based on what we're seeing today, I'd be surprised if net charge offs for the rest of 2016 weren't below the levels for the first half of this year. Non energy related problem loans, defined as risk grade 10 and higher, were basically flat compared with the first quarter. The second quarter total was only 4% of the total non energy loans. While contagion from low energy prices is frequently discussed and projected, to date very little impact has occurred. Given Texas' economic diversity, favorable job and population growth and business friendly environment, we currently believe that significant contagion is unlikely.

Another positive sign is that specific allocations in the loan loss allowance decreased significantly during the quarter. Now let me drill down and update you about our energy portfolio. Outstanding energy loans at the end of the second quarter totaled $1,500,000,000 or 13% of total loans. That compares with $1,760,000,000 or 15.3% of total loans at the 2015. Since year end, the energy portfolio has decreased by $255,000,000 Energy segments at the end of the second quarter were as follows: reduction totaled $1,060,000,000 or 71% of energy loans.

We recognized $455,000,000 or 43% of our production loans as a problem. Remember again that problems represent risk rates of 10 or higher. Some people call those loans criticized loans. Service totaled $227,000,000 or 15%. We recognized $70,000,000 or 31% as problem loans.

The remaining 14% of the portfolio consists of midstream, manufacturing, refining, traders and private clients, of which 19% were recognized as problems. Energy related borrowers that are on nonaccrual totaled $42,800,000 at the end of the second quarter compared to $114,000,000 at the end of the first quarter. The specific allocation for these energy credits totaled $2,500,000 in the second quarter, down from $27,500,000 in the first quarter. We have reserves associated with our energy portfolio of $66,300,000 representing 4.4% of the portfolio. At Frost, our typical energy borrower has spent his entire career in the business, and many are second or third generation in the energy industry.

They have been through cycles before and will go through them again. Our energy customers continue to execute their plans and strategies and they're communicating well with us. The current level of problems remains manageable. Since we formally review and adjust our price deck on a monthly basis, the spring borrowing base redeterminations had little, if any, impact on asset quality. As a result of our efforts to understand, identify and manage the potential impact of volatile commodity prices on our customers, we've made a more normal provision in the allowance in the second quarter.

Provided that energy prices do not deteriorate significantly from current levels, allowance provisions for the remainder of 2016 should reflect loan growth and typical Frost credit quality. Now I'd like to turn briefly to growth in the second quarter. Of the total loans outside the energy sector that grew at an annualized rate of 7.9% between the first and second quarters, about half was in commercial real estate, about a third was in C and I, and the remainder was in consumer and other. The increase in CRE fundings since the end of the first quarter has come through relationships that Frost has had for more than five years. At the same time, year to date new relationships are up by 17% compared to this time last year.

The new relationships gained over the past six months have added $322,000,000 in net new commitments and $262,000,000 in net new balances for loans since December 2015. Year to date, customer and prospect calls are each up by 13%. We booked 17% more non energy C and I commitments than in the 2015. Since year end, we've increased our personal lines of credit and home equity lines at an annualized rate of 15%, and the balances under those lines have increased at an annualized rate of 11%. And we're maintaining our credit disciplines, which has served us well.

At the same time, the reductions in our energy loans and higher than normal payoffs have put pressure on loan volumes. Payoffs have been driven by payoffs of commercial real estate and seasonal reductions in lines of credit, asset sales and problem loan payoffs. It's important to understand that these payoffs do not indicate that we've lost a relationship. In fact, we've lost only seven of these relationships that had more than $5,000,000 committed at the 2015, and three of those were participations. Even if the loan was moved or paid off, we usually maintain the non credit services due to our top quality service, and we expect to provide the relationships with credit again when needed.

This demonstrates how customers appreciate our team approach. Finally, our weighted pipeline is about 9% over where it was last quarter. It's a testament to the way we do business that even with the headwinds faced in the past few quarters, has managed to grow and expand. For example, early in the second quarter, we increased our dividend marking the twenty third consecutive year of dividend increases. Also during the second quarter and into the third, Frost has opened four new financial centers, one in East San Antonio, one in Dallas near North Park Mall and two locations in Austin, Lake Travis and East Seventh Street.

All of these advances are possible because we do business in Texas where the resiliency of the economy and the business friendly conditions in the state enable companies like Frost to thrive. You've heard me talk about the Frost value proposition that we offer a culture which treats everyone as significant, where they'll get a square deal and give them excellence at a fair price and a safe, sound place to do business. Any financial services company can say that, but at Frost, it's backed up by third party recognition. In the second quarter, Frost received the highest ranking in customer satisfaction in Texas in the J. D.

Power Retail Banking Satisfaction Study for the seventh consecutive year. I might add, it's only been given seven years. Consumer Reports recently named Frost the top U. S. Regional bank.

Frost earned 29 Greenwich Excellence Awards for commercial banking, and Frost was recently listed among the top banks in the country in the American Banker Reputation Institute survey of bank reputations this year. The fact that all that recognition happened while our industry has been facing challenges and while Frost has been expanding its offerings through technology and new financial centers shows the strength of the Frost team in the way we do business. So in closing, I'd like to thank our people for all their hard work and all their dedication. They're the stewards of this great company who built lasting customer relationships that have put Frost in a strong position building for the future. Now I'll turn the call over to our Chief Financial Officer, Jerry Salinas for some additional details.

Speaker 2

Thank you, Phil. I'm going to make some comments about the Texas economy, then I'll give some additional color on our financial performance before giving an update on 2016 guidance. I'll then turn the call back over to Phil for questions. The Texas economy continues to grow, thanks to market and industry diversity, population growth and a business friendly environment. According to the Dallas Fed, the state's economy grew 1.2% in the 2016 compared to a 1.3% decline in the first quarter of this year.

The Dallas Fed now expects 1.1% expansion in the 2016 for a total annual job growth of 0.5% in Texas this year. The state unemployment is 4.5% compared to 4.9% nationally. According to the Texas Comptroller's Office, the state unemployment rate has been at or below the national unemployment rate for more than nine years. Oil price increases in the first quarter and price stability in the second quarter provide reasons for optimism. Texas manufacturing activity improved in July, although the rise in the dollar continues to challenge manufacturers.

Looking at individual markets, Austin, Dallas Fort Worth and San Antonio remained strong with very low unemployment rates. Annualized job growth in Austin is 2.1% with an unemployment rate of only 3%. Growth is broad based with notable expansions in retail trade, healthcare and construction. Dallas Fort Worth is growing at an annualized rate of 2.7% or twice as fast as the national economy. The top three growth areas in DFW are financial services, education and health services and trade transportation and utilities.

The housing market remains red hot. Dallas Fort Worth is now the top U. S. Market in annual new home starts, thanks in part to a number of prominent corporate relocations from other states. The unemployment rate is near multi year lows, 3.5% in Dallas and 3.8% in Fort Worth.

San Antonio has the state's fastest annualized growth rate at 4.7% and an unemployment rate of only 3.5%. Trade, transportation and utilities, construction and other services are primary growth engines. In these three growing markets with extremely low unemployment rates, the availability of skilled workers is a challenge. Houston's economy is softer, but still formidable given the energy setbacks. Despite shedding 20% of its energy jobs since employment peaked eighteen months ago, Houston continues to add jobs in refining and petrochemicals and healthcare services.

Houston overall employment is down about 1.2% year to date, although its 4.7 unemployment rate is still lower than the national average. As I mentioned earlier, for Texas overall, the Dallas Fed expects 1.1% expansion in the 2016. Now looking at our financial performance. Our net interest margin for the quarter was 3.57, down just one basis point on a linked quarter basis from the 3.58% reported last quarter. The loan yield for the quarter was 4%, up one basis point from the first quarter.

The taxable equivalent yield on the investment portfolio was also 4%, down six basis points from the previous quarter and was impacted by a slightly higher proportion of lower yielding taxable securities, primarily treasuries in the second quarter as compared to the first. Our municipal portfolio at the end of the second quarter was $7,100,000,000 up $730,000,000 from $6,300,000,000 at the March. At the end of the second quarter, about 68% of the municipal portfolio was pre refunded or PSF insured. During the second quarter, the total investment portfolio averaged $11,800,000,000 up about $249,000,000 from the first quarter average of $11,500,000,000 Our capital levels remain strong with our common equity Tier one ratio at 11.9% at the June. Regarding consensus estimates, including our year to date as reported EPS of $2.18 we believe that the current mean of analyst estimates of $4.39 for the full year is a little low.

And with that, I'll turn the call back over to Phil.

Speaker 1

Thank you, Jerry. We'll now open up the call for your questions.

Speaker 0

Your first question comes from the line of Steven Appelbaum from JPMorgan. Your line is open.

Speaker 3

Hey, good morning, everybody.

Speaker 2

Good morning. Good morning.

Speaker 3

Can we start just one question on energy. I think you said special mention were flat, but could you give us the actual balance of special mention and classified and criticized as well?

Speaker 1

Yes. Are you talking about for the energy section?

Speaker 3

Yes, just for energy.

Speaker 1

Okay. Let's say the total of risk rate 10, which is going to be our criticized is $296,000,000 let's say, at the end of the second quarter. Risk rate 11 would be substandard would be $2.28 And then 12s and 13s would be about $42,000,000 combined.

Speaker 3

Okay. That's helpful. At $45 oil, how do you guys see this playing out from here? Should we expect to see potential problem loans start to decline? Or is it just too early?

Speaker 1

At $45 oil, our portfolio is stable as it relates to the oil piece of the portfolio. We're actually seeing some customers who are increasing drilling. We've seen rig counts increase, particularly in the Permian Basin at 45. I think our portfolio is probably stable at $40 say $40 to $45 as it relates to oil. Given the technology that's happened and the improvements in technology, improvements in efficiencies and drilling, 40,000,045 you can make a decent return if you're in a good place.

Another thing we've seen at these price levels is we've begun to see sales of properties. Just some of our customers, just anecdotally, one of them had a $400,000,000 sale. It's a public company. One is some things that are working right now either have been done or pending. One's got a $50,000,000 sale.

Another's got $125,000,000 sale. One's got an $80,000,000 sale. And what they're selling in most of these cases is acreage. It's really not production. And so what you see also, are public companies typically at this point that we're seeing doing these deals.

So it looks like people are trying to take advantage of what's happened with technology and efficiency to take advantage of some of this good properties and good acreage out there, and we're seeing them at good prices.

Speaker 2

Okay.

Speaker 3

That's helpful. Maybe just one follow-up. Are you seeing, again, with oil, given that it's recovered, increased confidence for commercial borrowers as well? I think you said the pipeline was up. But are you seeing confidence levels improve there?

It

Speaker 1

depends on the market that you're in. I think you've seen increasing confidence in some markets, that being, let's say, Austin, for example, North Texas. Houston, I'd say, is fairly consistent, not a lot of greater confidence, but they've been they've had a fair amount of confidence through this whole period of time. I think the weakest area is going to be out in heavily oil related economies like the Permian Basin and, say, Corpus Christi. But when oil got to be in the 40s, yes, it definitely let a lot more air in the room.

Okay.

Speaker 3

Thanks for all the color.

Speaker 1

Thank you.

Speaker 0

Your next question comes from the line of Emlen Harman from Jefferies. Your line is open.

Speaker 4

Hey, good morning.

Speaker 2

Good morning. Clearly,

Speaker 4

you guys the nonaccrual book down quite a bit this quarter. Could you talk about kind of what it was that brought those balances down, whether you mentioned some asset sales earlier, whether borrowers were able to kind of prove their financial condition, if it was something where you had to work out some credits or sell assets? Just be kind of curious how you're able to affect that decline and whether you'd anticipate being able to do some more of that?

Speaker 1

Well, the biggest factors were three credits and a little bit different situation in each one of them. The one nonenergy credit was commercial real estate. It was a hospital that had some problems. It was in bankruptcy, foreclosure, and it was sold. We recovered all of our balances, all our principal and interest, all our expenses, attorney's fees, etcetera.

It was sold for much more than what we had booked for or the it was sold for a great price. The other two were energy credits. One was a company that sold properties and was able to pay down debt. And so we were the beneficiaries of that. And then the third one was one where we saw a credit that we had written down significantly.

And when we saw what third party prices were being paid for that credit, we decided to hit the bid. We actually freed up about $4,500,000 in reserves related to that problem asset sale. And on the one where I said we had a company that sold energy properties, we freed up about $5,200,000 in reserve on that one. So when you look at the two energy credits, one which paid down because they sold properties and one which was a payoff because we sold the credit, we freed up about $10,000,000 in reserve for both of those combined.

Speaker 4

Got it. Thanks. And then if we just look at the total energy portfolio, looks like it was down a couple of 100,000,000 quarter over quarter. Would you expect to continue kind of diversifying out of that portfolio over the next few quarters? Just trying to get the size of that down.

Speaker 1

I think you're likely to see a decline overall in the energy component, but that doesn't mean we're not looking at good deals. And the deals that we're seeing, they are very heavily capitalized and they're in producing properties. And so there are people that are taking advantage of it. But we're continuing to work out of the weaker, the credits, the ones maybe where the relationship is not as strong as it should be or we'd like it to be and just prune the hedge, as we said for years, you know, get the let the good stuff grow and trim the stuff off the bottom that doesn't make sense for us to be in.

Speaker 4

Okay. Thanks. I'll step back.

Speaker 0

Your next question comes from the line of Brady Gailey from KBW. Your line is open.

Speaker 5

Hey, good morning, guys.

Speaker 2

Good morning. Good morning.

Speaker 5

Maybe just a follow-up on that last point. So it sounds like energy balances could head lower. Do you think we'll see the same magnitude of shrinkage over the next quarter or two that we saw in the second quarter? Or maybe to ask it differently, energy is at $1,500,000,000 Where would you expect that portfolio to bottom? I'm just trying to get a sense on you haven't grown total loans much at all in the first half of the year driven by the shrinkage of this energy book.

Speaker 1

Brady, I don't expect it to have the same kind of decline that you've seen it have over the last six to twelve months. It could decline some more. I think the rate of decline, as we've seen, has reduced. And again, we're beginning to see some deals that make a lot of sense based upon the way they're structured. So we as we see really good opportunities, we can take advantage of.

I don't really have a projection of what energy will be going forward. It's just going to depend upon what we see and our appetite for it. I will tell you that a number of people who used to be in this business apparently are not anymore. And so there are few of us there to take advantage of what's out there in the market. So as I've said before, we're going to continue to be in this business.

It's important to the country. It's important to Texas, we're going to be in it for the long term. But we're just we're not going to see a lot of growth in the business for a little while.

Speaker 5

Okay. And then you talked about Houston slowing, but it's still kind of hanging in there fine. What's your updated Houston CRE exposure? I think last quarter was around $760,000,000 Did that change much in 2Q?

Speaker 1

No, I don't think we've seen a lot of change. And I think the just looking at CRE overall, we feel really good about the portfolio. They're only about 3.8%, let's say, less than 4% of the CRE portfolio is classified 10% or higher, which would be criticized as we say the problem loans. If you look at some of the markets, Houston has about these are round numbers. Houston has got about 20% of our CRE portfolio.

It's got about 47,000,000 in loans classified as problems or, like I say, 10 or greater. Only about $19,600,000 of that relates to energy, and the majority of those are owner occupied warehouses. The largest energy related CRE credit that has an issue in Houston is only 3,500,000 We don't have any multifamily problems in Houston, no tenanted office building problems, no developer problems. If you look at San Antonio, which we have about, let's say, 25% of our CRE portfolio, no energy issues there, Only $14,500,000 are recognized as problems, so very clean there. If you look at Fort Worth, we've got about 20% of our CREs in Fort Worth, only about $16,000,000 of problems noted there.

Dollars 2,000,000 of that are energy related, and that's an owner occupied deal. Take a look at Dallas, for example, where we've got, say, 15% round numbers of the portfolio, about $36,000,000 recognized as problems. They have $8,300,000 related to energy. Oddly enough, that's a hotel in Midland. And so, the rest of the portfolio, think, is about well, you got Austin at 10%.

No issues there. Austin is a great market, as everyone knows. And then you've got about 10% leftover for all the rest and really not much in terms I would say overall, if you look at energy problems in our commercial real estate portfolio, in total, it's about $36,000,000 the largest of that being that $8,000,000 hotel in the Permian Basin that's just taken its ramp up. It's just a little behind schedule.

Speaker 5

All right. That's helpful. And then last for me. The tax rate keeps ticking down here. It's at 10.5%.

I think it was a little over 12% last quarter. What's a good forward run rate on the tax rate?

Speaker 2

Brady, I'd probably tend to go more towards that first quarter rate.

Speaker 5

The 12%? Yes.

Speaker 1

Okay. Thanks, guys. Thank you.

Speaker 0

Your next question comes from the line of David Richardson from Deutsche Bank. Your line is open.

Speaker 6

Hey, good morning guys.

Speaker 2

Good morning.

Speaker 6

Can you just talk about the securities purchases you made in the quarter and what those yields were? It sounded like you brought on a lot more munis. And can you also just talk about what your appetite there is in the back half of the year?

Speaker 2

Well, just as a reminder, we had sold $444,000,000 if I remember correctly, in the first quarter of the muni book. So some of that we were making up. But during the quarter, we purchased about $648,000,000 in municipal securities with a TE yield of about four sixty.

Speaker 6

And then how are you thinking about those purchases in the back half?

Speaker 2

Yes, you'll continue to see purchases during the latter part of the year. It won't be as accelerated or there won't be as much as we had in the first half of the year, but we'll still continue to make purchases.

Speaker 6

And then how large can that portfolio actually get as either a percentage of securities or as a percentage of assets? Do you guys have any like internal limits on that kind of thing or just was curious how you thought about that?

Speaker 1

I'd say that the main thing to keep in mind in municipals over time is that that's not something that you can continue to do indefinitely because you've got an amount of effective tax rate that you can apply to it, and that's a limited resource. You also want to make sure your duration is in line and you're not getting over your skis on that. And then you want to make sure your liquidity is good and strong because municipals aren't as liquid as other assets. It's a different ballgame as it relates to that. We keep our eye closely on all three of those things.

And as Jerry said, we've got room to do some additional, and we will do some in the additional we will do some in the second half of the year, although not the same extent as the first half. And as he said, we don't have to make up for the ones that we sold in the oil patch. So we recognize that that's not a forever strategy, and that's why we're working so hard and our people are doing a good job making calls and putting in pipeline and growing the portfolio up and down the segments, whether they be large deals, middle market deals or small deals.

Speaker 6

And then just given the I guess the deposit growth was a little bit slower than we had thought this quarter. How did you end up funding the purchases? Was it just like overnight borrowings that will be replaced later?

Speaker 2

Some of it was with just we've got excess balances at the Fed. I think at the end of the quarter, we were still at $3,000,000,000 So we used up some of that. But we did have some deposit growth that funded portions of it.

Speaker 6

Got you. And then just overall, how are you guys thinking about the NIM trend in the back half of the year? I guess bringing on these securities will certainly help it in 3Q, but how should we look at that?

Speaker 2

I think what I said last quarter, and I'm going stick by it. Last quarter, said that I would project that it would be in the flat to down, and I think we're still with that. I mean there's still some pricing pressure obviously that we're dealing with. So I think at this point that's the way we look at it.

Speaker 6

Great. All right. Thanks guys.

Speaker 1

Sure. Thank you.

Speaker 0

Your next question comes from the line of Stephen Moss from Evercore ISI. Your line is open.

Speaker 1

Stephen?

Speaker 7

Sorry about that. Good morning. Just wanted to start off with back to the energy book here. Historically, CullenFrost's energy borrowers had very little in terms of hedging. Wondering if that still remains the case today?

Speaker 1

Yes, it does. We've seen some hedging pick up, and we saw prices go up, but it hasn't been a wholesale change.

Speaker 7

Okay. So still, can, if I recall correctly, low single digits or mid single digits as a percentage of 2016, 2017 production?

Speaker 1

That's not an unreasonable number.

Speaker 7

Okay. And also, you mentioned with regard to energy that as long as oil prices remain stable, there will not be any incremental the provision will return more to normal levels. Just wondering at what price point do you believe you would have to start adding to energy reserves if prices were to decline further?

Speaker 1

I don't know the exact price point. I would say that the portfolio, though, has been is continuing to improve. You've got we did stress it before with oil prices down to $30 a barrel. And so we recognize that part of it. The energy customers that we have, remember, been working through problems, and we're beginning to see, as I mentioned earlier, deals get done.

A lot of capital will go into the business. And the fact that this has happened isn't just a recent phenomenon. Our customers have been working on these plans for the last year, and we've been working right alongside with them and talking to them, working with them through the entire period. So it kind of looks like it's all happened just at once, but people have really been working hard on this. So I believe our portfolio continues to improve.

And as we said, we stressed it at $30 before. And now I like to believe that our customers are in better shape to withstand if it does get softer as we move forward. And I wouldn't be surprised if prices got a little bit softer with the glut in gasoline and refineries slowing down somewhat. We could see prices move down a little bit further here, but that's not a great concern to us now.

Speaker 7

Okay. Got you. And then in terms of loan growth, I hear you in terms of the energy headwind here declining, but just excluding energy, kind of what do you think would be the growth rate for the remainder of the book, high single digits for loan growth or?

Speaker 2

I think that Phil mentioned that in the without energy, our loan growth was in the 7% range. And I think we said in the first quarter ex energy on a linked quarter, we were up maybe 6%. So I guess I wouldn't I'm not sure I'd go any different than something like that in that

Speaker 7

range. Perfect. Thank you very much.

Speaker 0

Your next question comes from the line of Emil Harmer from Jefferies. Your line is open.

Speaker 4

Hey guys. I had just a couple of other follow ups, if you don't mind. The insurance fees this quarter, the decline there looked like it was bigger than we would typically see seasonally. Was there anything unique that happened this quarter?

Speaker 2

Yes. We took it on a chin a little bit. We were impacted by some lost business is what you're seeing there during the quarter.

Speaker 4

Okay. So we should think about if we think about it on a year over year basis, it should potentially be a little lower going forward?

Speaker 2

Well, I think that well, I guess a full year, yes, it would be.

Speaker 4

Okay. And then you noted that consensus EPS looked a little bit low. I don't know how deep you get into it, but does it from your perspective, does it feel like the provision was the major delta of the difference there?

Speaker 2

We really don't spend a whole lot of time with the individual analyst estimates to be quite honest with you. If I had to just make a wild guess, I would have to say that the differences are probably provision. Okay. Right.

Speaker 4

Don't spend

Speaker 2

a lot of time with them. Sure.

Speaker 6

Got you.

Speaker 0

There are no further questions at this time. I'd like to turn the call back over to Phil. Thank you.

Speaker 1

Well, great. Well, we appreciate all your interest, and thank you for your questions. This will end our call.

Speaker 0

This concludes today's conference call. You may now disconnect.